Dragons’ Den: Business lessons from Series 15, Episodes 6, 7 and 8
Learn how to perfect your investor pitch as we take a closer look at the success stories from the latest episodes of the BBC show...
How should you pitch your start-up or small business to an investor?
According to Dragons' Den's longest-serving investor Deborah Meaden a successful pitch, as revealed in this interview, requires the following five things:
- You need to demonstrate that you've thought about the investor and can explain why they're the right fit.
- You need to show that you understand your business inside-out, but shouldn't worry about making a mistake.
- You should be dedicated to running the business yourself – don't expect an investor to run it for you.
- Your pitch should be simple and shouldn't overcomplicate things…
- And you should evidence the real value of your product or service: “What is it that makes it better? If I can understand that, then I’ll want to get involved with that business.”
To help you get pitch perfect for investors, we've rounded up the five successful pitches from the last three episodes of the popular BBC show to give you a greater understanding of what turns investors on (and off).
From bakes to bushy tails, here are the pitches from Dragons' Den's latest success stories…
Dragons’ Den success story: Nana's Manners (Episode 6)
Founders: Catherine and Chris Baldrey-Chourio
Concept: Children's cutlery
Investment sought: £50,000 for a 20% share
Investment received: £50,00 for 33.3% equal partnership (Touker Suleyman)
The winning pitch
Husband-and-wife duo Catherine and Chris Baldrey-Chourio entered the Den with the aim of getting investment from Touker Suleyman; the pair would leave the Den having gained the Startups Awards judge as an equal partner in their business.
Mumpreneur Catherine, a former teacher, began the pitch by sharing the story behind Nana's Manners. After teaching a class of four and five year-olds and watching them eat a hot meal independently – a scene she referred to as ‘chaos'- Catherine felt there must be another way to teach young children to use cutlery properly.
Having used pencil grips and special scissors designed to teach children to learn mobility, she found that, “unbelievably”, there was no cutlery” to do the same and so decided to design a range herself.
The range, which is targeted at children aged four to five, retails at £19.95 and offers the benefits of “teaching children the correct etiquette and teaching them to learn independently”.
With a recent offer from retailer JoJo Maman Bebe for 360 units, Catherine explained that the overall business vision was to establish the cutlery in homes, restaurants and schools.
This would then evolve to an entire product range that would see Nana's Manners become the “go-to place for helping children become brilliant at the basics”.
As a brand new start-up, the Baldrey-Chourios weren't able to provide revenue figures but did give a breakdown of their pricing strategy:
- Big profit margin: The product retails at £19.95 and the cost to manufacture is £4.25.
- Market comparison: Price children's cutlery typically ranges from £10 to £27, going up to £75 for designer brands.
- “If we committed to order volumes then we could shave a dollar off [the manufacturing cost] with no hard negotiations.”
What the Dragons had to say:
Peter Jones: “I think you've done a really great job. The design, quality and packaging of the product is fantastic. You're very investable and I do believe you're going to get people to buy this product but it's going to be very small – a niche of a niche – and I don't think you'll be able to generate a financial return that's sustainable so I'm out.
“I think you will have to reconsider the brand of ‘Nana's Manners' too […] as my mum is ‘grandma' to my kids and if she saw this in a shop she wouldn't buy it because it says ‘nana'.”
Deborah Meaden: “I completely agree and think you've made a mistake with the branding. I'm not sure how you own the word ‘nana' in the online space; my goodness it will be hard to differentiate yourself. I'm out.”
Tej Lalvani: “I think you need a bigger range of products in your range because with one product it's difficult. With a single product I think it would be a long time until I got my money back so I'm out.”
Touker Suleyman: “I'm in the baby world and this is interesting. I can do everything you want. It is a start-up and I'd like to come on this journey with you but there's a price. I'd like the three of us to be equal partners and for that you'll get more than you'll expect.”
Jenny Campbell: “Even though you're early-stage, you guys are very investable and you can see where you want to go but I think you just need some direction with that. You have an offer from the best Dragon in the Den to support where you're at and I'm going to leave you with Touker. I'm out.”
Dragons’ Den success story: Oomph (Episode 6)
Founder: Matthew Deasy
Concept: In-cup coffee brewer
Investment sought: £40,000 for 5%
Investment received: £40,000 for 15% (Jenny Campbell)
The winning pitch
Matthew Deasy entered the Den with the bold claim that he had invented “the fastest in-cup coffee brewer in the world”.
His invention, Oomph, produces a coffee within two minutes, said to be three times faster than a standard cafetiere, and also “produces a better cup of coffee”.
Deasy explained that the Oomph also brews at similar pressure to an expensive coffee machine and can be re-brewed – a USP as no other brewer cup in the market can do this. Once the Oomph coffee is made, you can drink it from the cup and take it with you as you would a travel mug or you can just pour from it as you would a kettle at home.
Deasy also evidenced some crowdfunding success for the business announcing that the Oomph had launched on Kickstarter last year and achieved £61,000 against a target of £24,000; “making it officially the most successful crowdfunded coffee gadget from the UK.”
Following the initial presentation, Deasy caused a stir after failing remember key financials and giving two of the Dragons faulty products which led to an angry Peter Jones declaring “this just isn't good enough”.
Deasy managed to turn the pitch around in his favour and win the Dragons back however, by revealing his track record in business; he owns a separate coffee machine business with turnover of £1.5m and over £20,000 in profit.
Assuming that nerves had got the better of him – Jones, for instance, remarked “you clearly have business acumen but it must be the pressure of the Den that is doing you an injustice” – Jenny Campbell made an offer to which Deasy accepted.
- Projecting £1.1m turnover “but I haven't done the actual figures on the actual units because it's a mix”.
- “So far this month we've done £20,000 in sales at £11,000 GP with net profit of £4,500. 4,400 units have gone out in total to date.”
- Sales are around 60-70% distribution.
What the Dragons had to say:
Peter Jones: “I don't think this is very well made, the lid doesn't shut properly [Deasy agreed this was the case]. This is shoddy. You need to bring in a product that you've at least checked properly. I think there's going to need to be a lot of work to get this product up to scratch and that's why I'm not going to invest.”
Touker Suleyman: “Matthew, you say this is the best coffee right? I think it's terrible – taste it and tell me if it's good coffee? Your numbers don't add up as well. If you've done £20,000 in one month then you'd multiply that and say projected turnover of £240,000 for this year but you're saying £1.1m turnover. With all due respect, your numbers are all over the place and I'm not going to invest in you.”
Jenny Campbell: “You have done the most uninvestable pitch today for an investable product, and probably an investable entrepreneur. Despite the fact that your product broke and your presentation of numbers was abysmal, I still think that there's something here and I say that because you must be doing something right and you clearly know the coffee industry.
“I think you're worth a punt at this stage so I am going to make you an offer but I warn you now that we're going to stress test the product. I'll give you all the money but I want 15%.”
Dragons’ Den success story: Tell Tails (Episode 7)
Founder: Hannah Gourlay
Concept: Wearable animal appendages
Investment sought: £70,000 for 15% equity
Investment received: £70,000 for 25% equity (Deborah Meaden)
The winning pitch
Enabling you to “unleash your inner creature” was a pitch from Hannah Gourlay for her business Tell Tails which specialises in wearable animal tails for humans.
With tails including foxes, squirrels and, aptly, dragons, the appendages “simply buckle on and you can get your waggle on”.
Gourlay explained that the business “all started as a bit of fun” when she made herself a lion's tail to wear to a music festival and attracted a lot of attention. The female entrepreneur decided to return the following year with a stall and sold out; quickly realising that “a massive business opportunity lay ahead”.
Gourlay revealed that Tell Tails now retails at 20 festivals and events annually and has a multi-lingual online store which ships globally. Products are stocked in Harrods, John Lewis, The Natural History Museum and will be launching in Hamley's next month.
Spurred on a by a desire to “make it work” and with no competitors in the market, Gourlay's overall ambition for the business is to go into licencing, a decision she'd come to after Hasbro and Little Tykes approached her. Dragon Touker Suleyma also believed this model could have legs (or tails) and suggested Disney as a licencing partner.
Following stiff competition between Suleyman, Tej Lalvani, and Deborah Meaden to add Tell Tails to their investment portfolio, Gourlay outfoxed Lalvani and Suleyman by accepting an offer of 25% from Meaden – 5% more than Lalvani and Sulyeman were offering.
- 2014 turnover: £84,000 with net profit of £23,000
- 2015 turnover: £112,000 with net profit of £40,000
- 2016 turnover: £160,000 with net profit of £50,000 “and on track to more than double that for 2017.”
What the Dragons had to say:
Tej Lalvani: “It's great to see you have a clear vision for the company. We have the number one baby vitamins and children's vitamins so we do a lot of marketing in regards to the children market and I think there could definitely be something there. I'm going to give you an offer but I want another Dragon on board so I'll offer you £35,000 for 15%.”
Peter Jones: “I'm not into the Touker licencing thing with Disney. I think it's a bit Micky Mouse as you'll end up giving away all of your margin. Different licencing deals could actually hurt your brand; I see this as a brand in it's own right. I don't buy into the big vision so I'm out.”
Jenny Campbell: “You're very credible but I feel there are others here that will add better value to this particular business so I'm out.”
Touker Suleyman: “I will team up with Tej and give you half of the money for 15% but what goes with that is everything I can offer to support you.”
Deborah Meaden: “I think it's a great idea and that you've executed it beautifully. The product is lovely and you've made it beautifully and you are very good so I'm going to make you an offer for all of the money for 25% of the business. The reason I want that [stake] is because I think you need to own this space quickly.”
Dragons’ Den success story: B-Tempted (Episode 8)
Founder: Sarah Hilleary
Concept: Gluten-free cakes
Investment sought: £75,000 in exchange for 5% stake
Investment received: £75,000 in exchange for 40% – dropping to 30% on buy-back (Tej Lalvani)
The winning pitch
Australian baker and self-proclaimed “massive Peter Jones fan”, Sarah Hilleary entered the Den looking for investment for her gluten-free cake business B-Tempted.
Having gone gluten-free by choice, the founder and ‘chief temptation officer' explained that she had been”astounded” by the lack of gluten-free cake products available. She decided to make her own and B-Tempted was born.
Every week, the business delivers to Wholefoods, Harrods, Selfridges and Fortnum & Mason, with the product range comprising of nine flavours in a variety of formats.
Hilleary suggested that now was a prime time for investors to back the business as it had been given the opportunity to launch into Tesco Express branches with three of its products – a deal that would bring revenue of £180,000 a year.
While Hilleary couldn't remember her profits, it was the flat turnover growth that alarmed Jones but Hilleary was able to give an explanation for this:
“The first four years were relatively flat and that's been because I didn't have the funding behind me to invest in new products and marketing. It's also because I'm Australian and I didn't know how my Visa situation would work out but now I have an indefinite leave to remain in the UK.”
Despite scepticism about the business' potential from all of the panel, but one, Hilary left the Den £75,000 better off following an offer from Tej Lalvani for eight times the equity stake the baking entrepreneur was initially willing to give away.
- 2012 turnover: £46,000
- 2013 turnover: £82,000
- 2014 turnover: £86,000
- 2015 turnover: £99,000
- 2016 turnover: £121,000
- 2017 forecast turnover: £367,000
- 2018 forecast turnover: £900,000
What the Dragons had to say:
Jenny Campbell: “Have you ever heard of the sniff test? It's something investors do about the business and something doesn't smell right here at all to me. You don't know your numbers; how do you get to your £1.5m valuation?
“Your business strategy and your valuation are half-baked and that shows a naivety. I can't see the help I can give you so I'm often tempted but, on this occasion, I'm not persuaded.”
Peter Jones: “Your products look fantastic and they taste brilliant. I thought you were going to come in with some hefty numbers and growth but you haven't. The size of the opportunity and what you've done demonstrates where you're at and I think the valuation is not just crazy, it's mad. I'm not going to be able to invest and say I'm out.”
Touker Suleyman: “I have a conflicting investment so for that reason I'm out.”
Tej Lalvani: “I must say, this is delicious! I like the product, it tastes good and you've been able to penetrate quite a few retailers, but with a Dragon on board you could do even better.
“The risk is very high for what you're asking so I'll make you an offer, but you're not going to like it. The offer is all of the money for 40% of the business, down to 30% if you hit year one and year two turnover. I'll open doors with ASDA, Sainsbury's and Waitrose.”
Dragons’ Den success story: ShakeSphere (Episode 8)
Founder: Rick Beardsell
Concept: Range of shaker bottles designed for protein and fitness shakes
Investment sought: £75,000 for a 10% equity share
Investment received: £75,000 for a 30% equity share – dropping to 20% on buy-back (Deborah Meaden and Tej Lalvani)
The winning pitch
Athletic entrepreneur Rick Beardsell marks the final success story in our round-up.
Having won two world records for sprinting, holding the fastest record for a 400 metre sprint for a 36 year-old, the fitness fanatic has launched a business in a market he knows well; protein shakes.
Beardsell's start-up, ShakeSphere, is a range of shaker bottles designed to function better than those currently on the market. With a round bottle and round lid, Beardsell explained that it overcame problems with existing shaker bottles which are square shaped – so protein powders get stuck in the corners – as well as issues with the mesh devices.
The shakers can also break down proteins quickly (it took 10 seconds to break down a banana into a puree) and there is a rotating section for protein pills and screw-off storage.
Beardsell outlined demand for the product with “several distributors already interested” including a large American distributor that works with big brands like the NFL.
Having entered the Den with a focus on securing Tej Lalvani as an investor partner – “he has a great background” – the product business founder managed to gain not just Lalvani's investment, but Meaden's too.
- Last three months: £35,000 revenue with £18,900 profit. 12,250 units have gone through trade, 1,000 units have sold to the general public.
- 2017-2018: Projecting turnover of £1.06m
- 2018-2019: Projecting turnover of £6.8m
What the Dragons had to say:
Touker Suleyman: “You've got all the credentials and you come across as very knowledgeable, I think the problem that I find with this is that it's an overcrowded market and you've not really come up with a product that's ready.”
Tej Lavani: “I think there's a bit of a design flaw because when you drink from the lid your nose hits the top and you can't really get access to the shake.”
Peter Jones: “I don't think the product is up to scratch – I have to go by what you've presented today and my personal feeling is that it's not good enough. I don't see the overall value here and I think you're going to struggle to sell this in the market. At a valuation of three quarters of a £1m, I'm just not interested and I'm out.”
Jenny Campbell: “I think you're going to sell some of these; I don't buy into the huge growth plan over the next two years. I can't get overly excited about it so I wish you all the best but I'm out.”
Deborah Meaden: “You've got a distributor in the US who's clearly very keen because they're helping you develop the product.
“It still feels like a bit of a punt but I'm going to make you an offer of half of the money because we have one Dragon left in who I think would add huge value and that for me would be a dream team, so half of the money but because of your early-stage I want 10% of the business.”
Tej Lalvani: “I have issues with the quality of the product. However, I think you are quite investable and I will make you an offer on terms that:
- 1. You need to show me a product that is sturdy and resolves all of the problems we've raised.
- 2. I would need more equity to take a punt on this. I'm willing to go halves with Deborah but I'd want 15%.”
Enjoyed this? Now take a look at Dragons' Den's most successful businesses here.